LyondellBasell plans quick sale of Houston oil refinery
Chemical producer LyondellBasell Industries NV aims to sell its Houston crude oil refinery as quickly as possible, said people familiar with the matter.
The company on Wednesday said it is considering strategic options for the refinery, including a potential sale. U.S. refiners last year suffered deep losses as the coronavirus pandemic slashed demand for motor fuels.
LyondellBasell joins a number of other operators that have put plants up for sale. Royal Dutch Shell Plc last year offered its Convent, Louisiana, refinery and Phillips 66 recently put a Belle Chasse, Louisiana, plant on the market.
"They hope to sell as soon as possible," one of the people familiar with the matter said of LyondellBasell.
SECOND TIME ON OFFER
The refinery along the Houston Ship Channel has been under Lyondell's sole ownership since 2006, when the company bought out minority partner Citgo Petroleum to end a troubled relationship.
This is Lyondell's second attempt to sell the Houston refinery, which the U.S. Energy Information Administration says can process 263,776 barrels per day of crude oil.
The first attempt, in 2016, was hampered by repeated fires and breakdowns at the Houston refinery that cut production to a third of capacity in the spring of that year. But by the fall, the plant had recovered sufficiently to draw offers over $1 billion from Saudi Aramco and Suncor.
Saudi Aramco denied bidding on the plant, but sources familiar with company's negotiations said a deal fell apart when Lyondell raised the asking price before formal bids.
Refinery values have fallen in the past five years as capacity, especially in the United States, is seen too great for an economy preparing to move away from fossil fuels for transportation.
CHEMICAL EXPANSION
The Houston refinery was once considered an essential source of feedstock for the company's chemical plants, but that changed following Basell's purchase of Lyondell in 2007 and the company's emergence from bankruptcy in 2010.
Since then, Lyondell has expanded, acquiring and building chemical plants around the world, especially in Asia as well as adding capacity along the U.S. Gulf Coast.
"While the Houston Refinery is a valuable, well-performing asset, we have long held the belief that it may be even more valuable as part of a larger refining system," Chief Executive Bob Patel said in a statement on Wednesday.
Lyondell also said in the statement it cannot provide assurances regarding the outcome or timing of the review process.
Bank of America is acting as a financial adviser to LyondellBasell and Vinson & Elkins as legal counsel. (Reporting by Rithika Krishna in Bengaluru and Erwin Seba in Houston; Editing by Shinjini Ganguli and Jonathan Oatis)
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